2012/13 Annual Report

Transcription

1 5 2012/13 Annual Report BRISBANE BRONCOS LEAGUES CLUB LIMITED

2 i Contents Notice of Annual General Meeting 1 Notice of Annual General Meeting 1 Directors and General Manager 2 President and General Manager s Report 4 Directors Report 6 Auditor s Independence Declaration 8 Directors Declaration 9 Independent Auditor s Report 10 Statement of Comprehensive Income 12 Statement of Financial Position 13 Statement of Changes in Equity 13 Statement of Cash Flows 14 Notes to the Financial Statements Notice is hereby given that the 25th Annual General Meeting of Brisbane Broncos Leagues Club Ltd, ACN will be held in the Darcey Mitchell Room, Brisbane Broncos Leagues Club Ltd, Fulcher Road, Red Hill on Thursday, 28 November 2013 at 6.00pm. Agenda 1. Apologies 2. Confirmation of minutes from the last Annual General Meeting held on Thursday, 29 November Business arising out of minutes. 4. Annual reports for adoption: 4.1 President and General Manager s Report; and 4.2 Directors Report, Independent Audit Report and Financial Statements. 5. Approval of Committee Members remuneration year ended 30 June General business (of which seven days written notice has been given). Dated 1st October 2013 by order of the Board of Directors. Geoff Kuehner General Manager/Secretary

3 2 Directors and General Manager 3 President Bruno Cullen Bruno Cullen (FAICD FAMI) has been President since November 2008 and a director for 10 years. He was the managing director of the Brisbane Broncos Limited until January 2011 after 8 years in that position. He is Chairman of the Queensland Country Credit Union Ltd and a director of Queensland Country Health Ltd. He is a fellow of both the Australian Institute of Company Directors (AICD) and the Australian Mutuals Institute (AMI). He is a director of the Queensland Academy of Sport (QAS). He is also a member of the Club s Audit committee. Vice President Gene Miles Gene Miles has been a director for 15 years and represented Australia in rugby league and is a former captain of the Brisbane Broncos. He is currently Executive Chairman of the Former Origin Greats (FOGS). Gene has been a selector for the Qld State of Origin team for the previous 13 years. He is also a life member of Broncos Leagues Club. Tom Condon Tom Condon has been a director for 14 years and is a retired civil engineer. He was a senior executive of Brisbane City Council for several years and is a life member of the Broncos Leagues Club. James Peterson James Peterson has been a director for 8 years and is a partner in the law firm of McCullough Robertson and specialises in corporations law and governance. He has been a director of a number of companies. He is also a member of the Club s Audit committee. Honorary Treasurer Ken Macdonald Ken Macdonald is a fellow of the Institute of Public Accountants. In 2005, he retired as Managing Director and Chief Executive Officer of the publicly listed automotive group AP Eagers Limited after 26 years service. He retired as a non-executive director of MTQ Insurance Services Limited in 2008 after 9 years service. He is also a member of the Club s Audit committee. Andrew Gee Andrew Gee joined the board in May He played 279 games for the Brisbane Broncos and was part of the Club s first 4 premierships. He also played rugby league for Queensland and Australia. He was the Brisbane Broncos player of the year in 1998 and has also won the clubman of the year award on 2 occasions. He is currently the General Manager for Football Operations at Brisbane Broncos Limited. Barry Maranta Barry Maranta led the purchase of the Broncos Leagues Club from the Wests Old Boys in 1988 and has been a director ever since; he was one of the original four owners and founding Chairman of the Brisbane Broncos Football Club. He was also subsequently the founding Chairman of the London Broncos Football Club playing in the English Super League. General Manager /Secretary Geoff Kuehner Geoff Kuehner was appointed General Manager in December 2006 and started his employment at Broncos Leagues Club in He holds a Bachelor of Business from Queensland University of Technology. He was a director of Kuehner Marketing for 5 years which consulted to numerous venues in Queensland and New South Wales. He sits on the Leagues Club Association of Australia Advisory Council. Ron Atkins Ron Atkins has been a director for 25 years. He has been President of the Wests Old Boys Association for 36 years and is a life member of that organisation. He was a public servant who worked with the Queensland State Government for 51 years. He is President of the Brisbane Branch of the Men of League.

4 4 President and General Manager s Report 5 Dear Members We are pleased to present the 2012/2013 Annual Report for Brisbane Broncos Leagues Club Ltd. During the year under review the Club produced a sound result with EBITDAS of $3.7 million and a profit before tax of $154,000. As we reported last year the Club would face a number of challenges in the 2012/2013 financial year. The carbon tax was introduced and we then saw gaming taxes increase by 5.0% in the highest threshold. The industry also faced softer economic conditions and combined these had a significant impact on profitability. A summary of the Club s financial performance for the 2012/2013 financial year is set out below. Revenue Sales food, bar & bottleshop 8,221 8,538 Gaming machine takings 13,226 13,663 Other 1,607 1,442 23,054 23,643 Expenses Cost of sales (3,676) (3,693) Gaming machine related expenses (5,263) (5,363) Employee & other (10,431) (11,038) (19,370) (20,094) Profit before interest, tax, depreciation & sponsorship (EBITDAS) 3,684 3,883* Finance costs (705) (764) Depreciation & amortisation (2,375) (2,262) Profit from operations Sponsorship Broncos Rugby League Club (450) (450) Profit before tax *The class action led by the Club against Alleasing was settled in As a result of this litigation a provision of $334,000 set aside for onerous lease commitments was reversed. During the year Brisbane Broncos Leagues Club Ltd celebrated its 25 year anniversary. From somewhat simple beginnings the Club has transformed into a $30 million entertainment complex which is home to the Brisbane Broncos and 50,000 members. There are many who have contributed to the success of the Club including the original founding owners and directors, management, staff and of course our members. Our support of the community continued during the 2012/2013 financial year and just over $1 million was distributed to local schools, charities, sporting organisations and community groups. Additionally our premier sponsorship of the Brisbane Broncos continued. Being the home of the Brisbane Broncos is a significant point of difference for the Club and its members and we are extremely proud of the relationship between the two organisations. Jointly we worked together to secure the future of the Brisbane Broncos at Red Hill and we wish to thank all involved who assisted with this process including the local community and the State and Federal Governments. This project will continue to evolve over the coming months and we will keep members updated on our progress. Our appreciation is extended to Dennis Watt, Paul White, Anthony Griffin and Sam Thaiday from the Brisbane Broncos for their continued support of the Club during the year. We also congratulate the Brisbane Broncos on their 25 year anniversary and the exceptional work they have done to become on of Australia s most recognised sporting organsiations. The Club is committed to solving the shortage of car parking and has lodged a development application with the Brisbane City Council that, if, approved, will increase car parking by 30%. We understand the frustrations to members, guests and local residents as a result of the current lack of car parking, however, we are confident, the proposed solution will be a major benefit to all. We will provide updates on this important initiative as we progress plans with Council. The Club s Master Plan has been reviewed and updated during the year. The Master Plan is an important document and provides the framework for the Board of Directors to make informed decisions on the future growth and financial performance of the Club. The Federal Government introduced gambling reform legislation in November These reforms will be phased in over the next ten years commencing in February 2014 with a $250 per day ATM withdrawal limit for gaming machine venues. Your Club is committed to reducing the incidence of problem gambling and will continue to actively implement strategies that will be effective in further lowering the incidence of this within the community. The Board of Directors had another extremely challenging year and we thank them for their diligence and high level of expertise. They have many responsibilities and once again have worked tirelessly and in the best interests of our members. Our management team and staff are once again to be congratulated for their continued commitment and loyalty. Their contributions to our day to day operations and financial performance are significant and we thank them for their hard work. We especially would like to mention Colleen Stormont, David Mason, Sally Dickinson, Julie Vanderwall, Melissa Soutar, Troy Friend, Marcus Gibson, Josh Arnold, Caroline Neate and Toby West. Finally but most importantly we thank our members. Without your support the Club simply wouldn t exist. We understand our members have a choice in a highly competitive industry and as a result we remain committed to providing only the very best in services and facilities for you to experience. It has been rewarding to meet those members who have been with us since day one during our 25 year celebrations and we also offer our thanks to these extremely loyal supporters of the Club. There is so much to look forward to as we commence the next important stage of our history. No doubt the challenges will continue but so will the many highlights. We are well positioned to ensure our continued success and will look forward to you helping us achieve it. Bruno Cullen President Geoff Kuehner General Manager

5 6 Directors Report 7 Your directors present their report on the Club for the year ended 30 June Directors The following persons were directors of the company during the whole of the financial year and up to the date of this report unless otherwise stated: B.P. Cullen (president) T.W. Condon B.D. Maranta R.W. Atkins K. Macdonald J. Peterson A. Gee G.W. Miles Bruno Cullen President Bruno Cullen (FAICD FAMI) has been President since November 2008 and a director for 10 years. He was the managing director of the Brisbane Broncos Limited until January 2011 after 8 years in that position. He is Chairman of the Queensland Country Credit Union Ltd and a director of Queensland Country Health Ltd. He is a fellow of both the Australian Institute of Company Directors (AICD) and the Australian Mutuals Institute (AMI). He is a director of the Queensland Academy of Sport (QAS). He is also a member of the Club s Audit committee. Gene Miles Vice President Gene Miles has been a director for 15 years and represented Australia in rugby league and is a former captain of the Brisbane Broncos. He is currently Executive Chairman of the Former Origin Greats (FOGS). Gene has been a selector for the Qld State of Origin team for the previous 13 years. He is also a life member of Broncos Leagues Club. Ken Macdonald Honorary Treasurer Ken Macdonald is a fellow of the Institute of Public Accountants. In 2005, he retired as Managing Director and Chief Executive Officer of the publicly listed automotive group AP Eagers Limited after 26 years service. He retired as a non-executive director of MTQ Insurance Services Limited in 2008 after 9 years service. He is also a member of the Club s Audit committee. Barry Maranta Barry Maranta led the purchase of the Broncos Leagues Club from the Wests Old Boys in 1988 and has been a director ever since; he was one of the original four owners and founding Chairman of the Brisbane Broncos Football Club. He was also subsequently the founding Chairman of the London Broncos Football Club playing in the English Super League. Ron Atkins Ron Atkins has been a director for 25 years. He has been President of the Wests Old Boys Association for 36 years and is a life member of that organisation. He was a public servant who worked with the Queensland State Government for 51 years. He is President of the Brisbane Branch of the Men of League. Tom Condon Tom Condon has been a director for 14 years and is a retired civil engineer. He was a senior executive of Brisbane City Council for several years and is a life member of the Broncos Leagues Club. James Peterson James Peterson has been a director for 8 years and is a partner in the law firm of McCullough Robertson and specialises in corporations law and governance. He has been a director of a number of companies. He is also a member of the Club s Audit committee. Andrew Gee Andrew Gee joined the board in May He played 279 games for the Brisbane Broncos and was part of the Club s first 4 premierships. He also played rugby league for Queensland and Australia. He was the Brisbane Broncos player of the year in 1998 and has also won the clubman of the year award on 2 occasions. He is currently the General Manager for Football Operations at Brisbane Broncos Limited. General Manager /Secretary Geoff Kuehner Geoff Kuehner was appointed General Manager in December 2006 and started his employment at Broncos Leagues Club in He holds a Bachelor of Business from Queensland University of Technology. He was a director of Kuehner Marketing for 5 years which consulted to numerous venues in Queensland and New South Wales. He sits on the Leagues Club Association of Australia Advisory Council. 2. Principal Activities The principal activities of the company are to provide a social and sporting club and to support the game of rugby league specifically through the Brisbane Broncos. There were no significant changes in the nature of the company s activities during the financial year. 3. Objectives & Strategies Short term The short term objective is to reduce current debt levels within a reasonable time frame whilst maintaining state of the art facilities and amenities that service the needs of our membership and community. The club will continue to promote and develop sporting and social activities ensuring we continue to maximise the clubs exposure and involvement within our community. Long term The long term objective of the Club is to conduct its business affairs in a sound and responsible manner, to promote the game of rugby league through our association and sponsorship of the Brisbane Broncos and to provide facilities and amenities that improve the financial and future viability of the club. Strategy for achieving objectives - The primary strategies to achieve the objectives is through strong financial management and the use of key performance indicators (KPIs) to ensure that the Club s business plans, budgets and cash flows are current and relevant. Business activities are managed in a pro-active manner to ensure that the goals, objectives and business strategies are achieved. The current departmental/management reporting strategies support this objective. The Club s checks and control measures ensure the KPIs provide relevant and accurate information to be utilised in the decision making processes of the club. The club is modern and well positioned for the next decade to ensure consistent growth and long term sustainability. Performance measurement and key performance indicator - The KPIs are reviewed by executive management and the Board of Directors on a regular basis to ensure relevance at any particular point in time. Business activities are reviewed and altered to adhere to these documents. 4. Meetings of Directors During the financial year 11 general director meetings and 1 audit committee meeting were held. Attendances by each director were as follows: DIRECTORS MEETINGS Number Eligible to Attend Number Attended AUDIT COMMITTEE MEETINGS Number Eligible to Attend Number Attended B.P. Cullen B.D. Maranta R.W. Atkins There were no other committees. 5. Limited Liability of Members The company was incorporated under the Corporations Act 2001 as a company limited by guarantee. If the company is wound up, and there are remaining liabilities of the company after realising the company s assets, the constitution requires each member to contribute a maximum of $100 each toward meeting any outstanding obligations of the company. At 30 June 2013, the total amount that members of the company (at $100 per member) may be liable to contribute if the company is wound up is $472,070 (2012: $467,480). 6. Rounding of Amounts Pursuant to class order 98/0100, issued by the Australian Securities & Investments Commission, amounts in the directors report and financial report have been rounded off to the nearest thousand dollars unless otherwise indicated. 7. Auditor s Independence Declaration A copy of the auditor s independence declaration as required under section 307C of the Corporations Act 2001 is attached to this report. Signed at Brisbane this 26th day of September 2013 in accordance with a resolution of directors. Bruno Cullen (President) DIRECTORS MEETINGS Number Eligible to Attend Number Attended AUDIT COMMITTEE MEETINGS Number Eligible to Attend Number Attended G.W. Miles T.W. Condon J. Peterson K. Macdonald A. Gee

6 8 Auditor s Independence Declaration Directors Declaration 9 In the directors opinion: (a) the attached financial statements and notes are in accordance with the Corporations Act 2001, including: (i) complying with Australian Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements; and (ii) giving a true and fair view of the Club s financial position as at 30 June 2013 and of its performance for the financial year ended on that date; and (b) there are reasonable grounds to believe that the Club will be able to pay its debts as and when they become due and payable The Directors Brisbane Broncos Leagues Club Ltd Fulcher Road RED HILL QLD 4059 Signed at Brisbane on 26 September 2013 in accordance with a resolution of directors. Auditor s Independence Declaration As lead auditor for the audit of Brisbane Broncos Leagues Club Ltd for the year ended 30 June 2013, I declare that, to the best of my knowledge and belief, there have been: (i) no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and (ii) no contraventions of any applicable code of professional conduct in relation to the audit. PITCHER PARTNERS Director R C N WALKER Partner Brisbane, Queensland 26 September 2013

7 10 Independent Auditor s Report 11 Independent Auditor s Report to the Members of Brisbane Broncos Leagues Club Ltd We have audited the accompanying financial report of Brisbane Broncos Leagues Club Ltd, which comprises the statement of financial position as at 30 June 2013, the statement of comprehensive income, the statement of changes in equity and the statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information, and the directors declaration. Directors Responsibility for the Financial Report The directors of the company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards - Reduced Disclosure Requirements and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. Auditor s Responsibility Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. Those standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor s judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the company s preparation of the financial report that gives a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Independence In conducting our audit, we have complied with the independence requirements of the Corporations Act Opinion In our opinion, the financial report of Brisbane Broncos Leagues Club Ltd is in accordance with the Corporations Act 2001, including: (i) giving a true and fair view of the company s financial position as at 30 June 2013 and of its performance for the year ended on that date; and (ii) complying with Australian Accounting Standards - Reduced Disclosure Requirements and the Corporations Regulations PITCHER PARTNERS RCN WALKER Partner Brisbane, Queensland 26 September 2013

8 12 Statement of Comprehensive Income for the year ended 30 June 2013 Statement of financial position as at 30 June NOTES Revenue Food & beverage 8,221 8,538 Gaming machine takings 13,226 13,663 Other revenue 2 1,607 1,442 Other income ,054 23,977 Expenses Food & beverage 7,114 7,302 Gaming 5,263 5,362 Promotions and entertainment 2,198 2,401 Membership Property costs 3,761 3,669 Administration 2,409 2,405 Finance costs Other expenses ,900 23,570 Profit before income tax Income tax (expense) / credit 3 23 (71) Profit for the year NOTES Current Assets Cash and cash equivalents Trade and other receivables Inventories Current tax assets Other assets Total Current Assets Non-Current Assets Property, plant and equipment 7 19,946 19,557 Investment properties 8 2,207 1,500 Intangible assets Deferred tax assets Total Non-Current Assets 22,204 21,109 Total Assets 23,090 22,055 Current Liabilities Trade and other payables 11 1,652 2,253 Borrowings 12 3,057 7,877 Provisions Other liabilities Total Current Liabilities 5,339 10,766 Other comprehensive income Total comprehensive income for the year Non Current Liabilities Borrowings 12 8,862 2,594 Provisions Other liabilities Total Non-Current Liabilities 8,952 2,667 Total Liabilities 14,291 13,433 Net Assets 8,799 8,622 Members Funds Retained profits 15 8,799 8,622 Statement of changes in equity for the year ended 30 June 2013 Members funds at the beginning of the year 8,622 8,286 Profit for the year Members funds at the end of the year 8,799 8,622 The above statement of comprehensive income should be read in conjunction with the accompanying notes. The above statement of financial position and statement of changes in equity should be read in conjunction with the accompanying notes.

9 14 Statement of Cash Flows for the year ended 30 June 2013 Notes to the Financial Statements for the year ended 30 June NOTES Cash Flows from Operating Activities Cash receipts in the course of operations 25,069 25,789 Cash payments in the course of operations (22,193) (22,647) Membership fees received Finance costs paid (711) (820) Income taxes paid 89 (119) Net cash inflow from operating activities 19 2,497 2,404 Cash Flows from Investing Activities Proceeds from sale of property, plant and equipment 33 Payments for property, plant and equipment (515) (1,333) Payments for intangible assets (7) (20) Payments for investment properties (740) (1,546) Net cash outflow from investing activities (1,229) (2,899) Cash Flows from Financing Activities Proceeds from bank borrowings 1,023 3,050 Repayment of bank borrowings (905) (1,200) Repayment of hire purchase liabilities (1,166) (1,265) Net cash outflow from financing activities (1,048) 585 Net increase in cash held Cash and cash equivalents at beginning of financial year 87 (3) Cash and cash equivalents at end of financial year The above statement of cash flows should be read in conjunction with the accompanying notes. 1. Summary of Significant Accounting Policies The following is a summary of the material accounting policies adopted by the Brisbane Broncos Leagues Club Limited (the Club ) in the preparation of the financial report. The accounting policies have been consistently applied, unless otherwise stated. Basis of Preparation These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and Interpretations issued by the Australian Accounting Standards Board and the Corporations Act The Club is a not-for-profit entity for the purpose of preparing the financial statements. Compliance with Australian Accounting Standards Reduced Disclosure Requirements AASB101 The financial statements of the Club comply with Australian Accounting Standards Reduced Disclosure Requirements as issued by the Australian Accounting Standards Board (AASB). New and amended standards adopted None of the new standards and amendments to standards that are mandatory for the first time for the financial year beginning 1 July 2012 affected any of the amounts recognised in the current period or any prior period and is not likely to affect future periods. Early adoption of standards The Club has elected to apply AASB 1053 Application of Tiers of Australian Accounting Standards and AASB Amendments to Australian Accounting Standards arising from Reduced Disclosure Requirements. The adoption of AASB 1053 and AASB allowed the Club to remove a number of disclosures. There was no other impact on the current or prior year financial statements. Critical accounting estimates The preparation of financial statements requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Club s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in note 1(q). Historic cost convention These financial statements have been prepared under the historical cost convention, as modified by the revaluation of available for sale financial assets, financial assets and liabilities (including derivative instruments) at fair value through profit or loss, certain classes of property, plant and equipment and investment property. (a) Cash and Cash Equivalents Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less, and (for the purposes of the cash flow statement) bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities on the statement of financial position. (b) Inventories Inventories are measured at the lower of cost and net realisable value. Costs are assigned to individual items of inventory, mainly on the basis of weighted average costs. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs necessary to make the sale. (c) Property, Plant and Equipment Property, plant and equipment are measured on the cost basis, less depreciation and impairment losses. Subsequent costs are included in the asset s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Club and the cost of the item can be measured reliably. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred. The depreciable amount of all property, plant and equipment, including building and capitalised leased assets, but excluding freehold land, is depreciated on a straight-line basis over the assets useful lives to the Club commencing from the time the asset is held ready for use. The expected useful lives are as follows: Class Life (Years) Buildings Plant and equipment 3-10 Leased plant and equipment 3-5

10 16 Notes to the Financial Statements for the year ended 30 June 2013 Notes to the Financial Statements for the year ended 30 June The assets residual values and useful lives are reviewed, and adjusted if appropriate, at each balance date. An asset s carrying amount is written down immediately to its recoverable amount if the asset s carrying amount is greater than its estimated recoverable amount. Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains or losses are included in profit or loss. (d) Investment properties Investment properties, principally comprising residential properties, are held for long-term rental yields and are not occupied by the group. Investment properties are carried at fair value, which is based on active market prices, adjusted, if necessary, for any difference in the nature, location or condition of the specific asset. These valuations are reviewed annually by the Directors. Changes in fair values are recorded in the profit or loss as part of other income or expenditure. (e) Intangible Assets Software assets have a finite useful life and are carried at cost less accumulated amortisation and impairment losses. Amortisation is calculated using the straight-line method to allocate the cost of software over its estimated useful life of 3 years on average. (f) Income Tax The income tax expense or revenue for the period is the tax payable on the current period s taxable income, based on the national income tax rate, adjusted by changes in deferred tax assets and liabilities attributable to temporary differences between the tax bases of assets and liabilities and their carrying amounts in the financial statements, and to unused tax losses. Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply when the assets are recovered or liabilities are settled, based on those tax rates which are enacted or substantively enacted. The relevant tax rates are applied to the cumulative amounts of deductible and taxable temporary differences, to measure the deferred tax asset or liability. An exception is made for certain temporary differences arising from the initial recognition of an asset or a liability. No deferred tax asset or liability is recognised in relation to these temporary differences if they arose in a transaction, other than a business combination, that, at the time of the transaction, did not affect either accounting profit or taxable profit or loss. Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses. Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously. The deferred tax liabilities in relation to investment property that is measured at fair value is determined assuming the property will be recovered entirely through sale. Current and deferred tax balances attributable to amounts recognised in other comprehensive income or directly in equity are also recognised directly in other comprehensive income or equity. (g) Trade and Other Payables Trade and other payables are recognised initially at fair value and subsequently measured at amortised cost. These amounts represent liabilities for goods and services provided to the Club prior to the end of financial year, which are unpaid. The amounts are usually unsecured and due within 30 days of recognition. (h) Borrowings Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in profit or loss over the period of the borrowings using the effective interest method. Fees paid on the establishment of loan facilities, which are not incremental costs relating to the actual draw-down of the facility, are recognised as prepayments and amortised on a straight-line basis over the term of the facility. Borrowings are classified as current liabilities unless the Club has an unconditional right to defer settlement of the liability for at least 12 months after the balance date. (i) Leases Leases of property, plant and equipment, where the Club has substantially all the risks and rewards of ownership, are classified as finance leases. Finance leases are capitalised at the lease s inception at the lower of the fair value of the leased property and the present value of the minimum lease payments. The corresponding rental obligations, net of finance charges, are included in liabilities. Each lease payment is allocated between the liability and finance cost. The finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The property, plant and equipment acquired under finance leases are depreciated over the estimated useful life of the asset. Where there is no reasonable certainty that the lessee will obtain ownership, the asset is depreciated over the shorter of the lease term and the asset s useful life. Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to profit or loss on a straight-line basis over the lease term. (j) Employee Benefits Wages and salaries, annual leave and sick leave Liabilities for wages and salaries, including non-monetary benefits, annual leave and accumulating sick leave expected to be settled within 12 months of the reporting date are recognised in respect of employees services up to the reporting date and are measured at the amounts expected to be paid when the liabilities are settled. Long service leave The liability for long service leave which is not expected to be settled within 12 months after the end of the period in which the employees render the related service is recognised in the provision for employee benefits and measured as the present value of expected future payments to be made in respect of services provided by employees up to the reporting period. Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using market yields at the reporting date on national government bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows. Superannuation The Club makes contributions to defined contribution superannuation funds. Contributions are recognised as an expense as they become payable. (k) Provisions Provisions are recognised when the Club has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount has been reliably estimated. (l) Financial Instruments The Club classifies its financial assets in the following categories: financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments and available-for-sale financial assets. The classification depends on the purpose for which the investments were acquired. Recognition Financial instruments are initially measured at fair value plus transaction costs (except for financial assets carried at fair value through profit or loss). Subsequent to initial recognition these instruments are measured as set out below. Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are stated at amortised cost using the effective interest method. Other The Club does not have any financial instruments classified as at fair value through profit or loss, available-for-sale or held-to-maturity. Fair value Fair value is determined based on current bid prices for all quoted investments. Valuation techniques are applied to determine the fair value of all other financial assets and liabilities, including discounted cash flow analysis, recent arm s length transactions, reference to similar instruments and option pricing models. Impairment At each reporting date the Club assesses whether there is objective evidence that a financial asset has been impaired. Impairment losses are recognised in profit or loss, where applicable.

11 18 Notes to the Financial Statements for the year ended 30 June 2013 Notes to the Financial Statements for the year ended 30 June (m) Impairment of Assets At each reporting date the Club reviews the carrying values of its assets to determine whether there is any indication that those assets have been impaired. If such an indication exists, the recoverable amount of the asset, being the higher of the asset s fair value less costs to sell and value in use, is estimated and compared to the asset s carrying value. Any excess of the asset s carrying value over its recoverable amount is expensed to profit or loss. Where it is not possible to estimate the recoverable amount of an individual asset, the Club estimates the recoverable amount of the cash-generating unit to which the asset belongs. (n) Goods and Services Tax Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST), except: where the amount of GST incurred is not recoverable from the taxation authority, it is recognised as part of the cost of acquisition of an asset or as part of an item of expense; or for receivables and payables which are recognised inclusive of GST. The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables. Cash flows are presented in the cash flow statement on a gross basis, except for the GST component of investing and financing activities, which are disclosed as operating cash flows. (o) Revenue Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are net of returns, trade allowances and amounts collected on behalf of third parties. Revenue from sale of goods, such as food and liquor, is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer and the costs incurred or to be incurred in respect of the transaction can be measured reliably. Risks and rewards of ownership are considered passed to the buyer at the time of delivery of the goods to the customer. Revenue from gaming machines is recognised on the basis of daily takings. Interest revenue is recognised as the interest accrues (using the effective interest rate method). Revenue from membership fees is recognised over the membership period. Members subscription payments in advance are included in unearned revenue. Other amounts received in advance of provision of goods or services are also included in unearned revenue. (p) Trade and Other Receivables Trade and other receivables are recognised initially at fair value and subsequently measured at amortised cost, less provision for impaired receivables. Trade and other receivables are usually due for settlement no more than 30 days from the date of recognition. Collectability of receivables is reviewed on an ongoing basis. Debts, which are known to be uncollectible, are written off. A provision for impaired receivables is established when there is objective evidence that the Club will not be able to collect all amounts due according to the original terms of receivables. The amount of the provision is the difference between the asset s carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. The amount of the provision is recognised in profit or loss. Cash flows relating to short-term receivables are not discounted if the effect of discounting is immaterial. (q) Critical Accounting Estimates and Judgements The Club evaluates estimates and judgements incorporated into the financial report based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the Club. Key estimates and judgements impacting the financial statements are as follows: Recoverable amount of property, plant and equipment The Club assesses impairment at each reporting date by evaluating conditions specific to the Club that may lead to impairment of assets. Where an impairment trigger exists, the recoverable amount of the assets is determined. The analysis to assess the recoverable amount of property, plant & equipment is based on their value in use which involves an assessment of the Club s net present value of estimated future cash flows. There are a number of critical assumptions used in the value in use calculation, in particular the growth rate of earnings, the level and timing of future capital expenditure and the impact on earnings, and the discount rate applied to the net cash flows. No impairment triggers were noted during the last two financial years. (r) Comparatives Where necessary, comparative figures have been adjusted to conform with changes in presentation in the current year. (s) General This financial report covers Brisbane Broncos Leagues Club Ltd as an individual entity. Brisbane Broncos Leagues Club Ltd is a public company limited by guarantee, incorporated and domiciled in Australia. Its registered office and principal place of business is: Brisbane Broncos Leagues Club Ltd Fulcher Road RED HILL QLD 4059

12 20 Notes to the Financial Statements for the year ended 30 June 2013 Notes to the Financial Statements for the year ended 30 June Revenue and Expenses Profit before income tax expense includes the following specific items: Other revenue Commissions Sponsorships Membership fees Rent & recovery of outgoings Entertainment shows Other ,607 1,442 Other income Onerous lease reversed 334 Expenses Depreciation and Amortisation Depreciation - buildings plant and equipment 1,950 1,686 Amortisation - software leased plant and equipment Total depreciation and amortisation 2,375 2,262 Finance Costs Interest on bank loans and overdraft Interest on finance leases and hire purchase liabilities Cost of sales food, bar & bottleshop 3,676 3,693 (Profit) / Loss on sale of plant & equipment (18) 81 Loss from fair value adjustment investment properties (see note 8) Sponsorship Brisbane Broncos Rugby League Club Ltd Employee benefits expense* 5,915 6,232 Defined contribution superannuation expense* Income Tax Income tax expense Current tax (21) 6 Deferred tax (2) 65 (23) 71 Numerical reconciliation of income tax expense to prima facie tax payable Profit for the year before income tax expense Income tax calculated at the Australian rate of 30% (2012: 30%) Tax effect of amounts which are not deductible/(taxable) in calculating taxable income: - Non-assessable net mutual income (293) (386) - Members only income (149) (127) - Members only expenditure Sponsorship Non-deductible amortisation Other items 34 (34) - Benefit of tax losses not recognised 86 - Under/(over) provision in prior year (21) 6 Income tax expense/(credit) (23) Trade and Other Receivables Trade receivables Amounts receivable from Brisbane Broncos Football Club Other receivables Refer to note 18 for information on amounts receivable from related parties 5. Inventories Finished goods - at cost Other Assets Prepayments & deposits * Superannuation expense is also included within employee benefits expense

13 22 Notes to the Financial Statements for the year ended 30 June 2013 Notes to the Financial Statements for the year ended 30 June Property, Plant and Equipment Land at cost 5,620 5,620 Buildings - at cost 19,717 19,717 Accumulated depreciation and impairment (12,402) (12,022) 7,315 7,695 Plant and equipment - at cost 15,590 13,498 Accumulated depreciation (8,579) (7,299) 7,011 6,199 Plant and equipment under finance lease - at cost 398 Accumulated amortisation (355) 43 Total property, plant and equipment 19,946 19,557 Reconciliations Reconciliations of the carrying amounts of each class of property, plant and equipment are set out below: PLANT EQUIPMENT LAND BUILDINGS OWNED LEASED TOTAL $ 000 Balance at 1 July ,620 8,075 4, ,907 Additions 3,021 3,021 Disposals (37) (81) (118) Transfers 91 (91) Depreciation/Amortisation (380) (1,686) (187) (2,253) Balance at 30 June ,620 7,695 6, ,557 Additions 2,769 2,769 Disposals (7) (8) (15) Depreciation/Amortisation (380) (1,950) (35) (2,365) Balance at 30 June ,620 7,315 7,011 19,946 Assets Pledged as Security - Refer to note Investment properties Investment properties at fair value 2,207 1,500 Movement in investment properties: Opening balance 1,500 Additions at cost 740 1,585 Net loss from fair value adjustments (33) (85) Closing balance 2,207 1,500 In the 2013 financial year the Club purchased an additional residential property. The 3 investment properties owned by the Club adjoin the Club on the southern side and are being leased to Brisbane Broncos Football Club or other third parties. At 30 June 2012 the directors assessed the fair value of these properties at $2.2 million based on curbside valuations by a real estate showing a range of market values. Assets Pledged as Security Refer to note Intangible Assets Software - at cost Accumulated amortisation (50) (75) Reconciliations Balance at 1 July Additions 7 20 Amortisation (10) (9) Balance at 30 June Deferred Tax Assets Deferred tax assets Deferred income tax relates to the following: Leased plant and equipment 1 (2) Investment properties 1 3 Lease liabilities 1 Employee benefits Accrued expenses 6 8 Net deferred tax assets 31 29

14 24 Notes to the Financial Statements for the year ended 30 June 2013 Notes to the Financial Statements for the year ended 30 June Trade and Other Payables Trade creditors and accruals 1,455 1,656 Other payables (construction) 440 Amounts payable to related parties ,652 2,253 Refer to note 18 for information on amounts payable to related parties. 12. Borrowings Current Secured Bank overdraft Bank loans / bills 1,200 6,400 Hire purchase liabilities 1,671 1,104 2,991 7,822 Unsecured Other loans ,057 7,877 Non-Current Secured Bank loans / bills 7,307 2,000 Hire purchase liabilities 1, ,862 2,594 Assets Pledged as Security All the assets of the Club are pledged as security Refer to note 20 for information on financial facilities. 13. Provisions Current Employee benefits Non-Current Employee benefits Other Liabilities Current Unearned revenue Non-Current Unearned revenue Retained Profits Retained profits at the beginning of the financial year 8,622 8,286 Profit for the year Retained profits at the end of the financial year 8,799 8, Company Limited by Guarantee The Club is a public company limited by guarantee under the Corporations Act The amount which is capable of being called up in the event of winding up of the Club is not to exceed $100 per member by virtue of the Club's memorandum of association. 17. Commitments for Expenditure Finance leases Within one year 36 Later than one year but not later than five years Minimum lease payments 36 Finance leases comprise leases of items of plant and equipment, mainly poker machines, under commercial finance lease terms and conditions. Leased liabilities are secured by the underlying assets. Hire purchases Commitments in relation to hire purchases are payable as follows: Within one year 1, Later than one year but not later than five years 1, Minimum payments 3,448 1,662 Future finance charges (222) (111) 3,226 1,551 Hire purchases comprise of items of plant and equipment, mainly poker machines, under commercial hire purchase terms and conditions. Hire purchase liabilities are secured by the underlying assets.